The optimal allocation of prizes in two-stage contests

Shahar Alshech; Aner Sela

doi:https://doi.org/10.1016/j.econlet.2021.109850

The optimal allocation of prizes in two-stage contests

Shahar Alshech, Aner Sela

Department of Economics

Ben-Gurion University of the Negev

Research output: Contribution to journal › Article › peer-review

Abstract

We study two-stage contests in which the designer can award a prize for winning in each stage, and also a prize for winning in both stages. For this purpose, we analyze the optimal allocation of prizes for a designer who wishes to maximize the players’ total effort when the matches in each stage are modeled as Tullock contests. It is demonstrated that the prize for winning in both stages should be allocated in the two-stage Tullock contest with two players, but not when there are more than two players.

Original language	English
Article number	109850
Journal	Economics Letters
Volume	203
DOIs	https://doi.org/10.1016/j.econlet.2021.109850
State	Published - 1 Jun 2021

Keywords

Best-of-two contests
Tullock contests
Two-stage contests

All Science Journal Classification (ASJC) codes

Finance
Economics and Econometrics

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https://doi.org/10.1016/j.econlet.2021.109850

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abstract = "We study two-stage contests in which the designer can award a prize for winning in each stage, and also a prize for winning in both stages. For this purpose, we analyze the optimal allocation of prizes for a designer who wishes to maximize the players{\textquoteright} total effort when the matches in each stage are modeled as Tullock contests. It is demonstrated that the prize for winning in both stages should be allocated in the two-stage Tullock contest with two players, but not when there are more than two players.",

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The optimal allocation of prizes in two-stage contests

Abstract

Keywords

All Science Journal Classification (ASJC) codes

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